If you’ve ever had a run-in with a debt collection agency, chances are you’ve experienced how resilient and scary they can be. Most collection agencies resort to very questionable tactics just to get debtors to pay up. It’s very easy to fall for these scare tactics if you don’t know your rights. Fear not, we’ll help you understand which laws protect you from collectors and the things they do or tell you to do.
The Federal Trade Commission
The Federal Trade Commission (FTC) is a federal agency that protects the rights of consumers. It creates enforces laws that gives protection to citizens from abusive behavior from lenders and debt collection agencies. According to their statement:
“The Federal Trade Commission (FTC), the nation’s consumer protection agency, enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.”
Under the FDCPA, collectors must be able to send a written validation notice that indicates the amount owed by the debtor within five days of initial contact. It must include the exact amount owed, the name of the institution or establishment to which the debt is owed, verification and validation of the amount unless disputed within 30 days, a statement indicating that the collector verifies information if the amount is indeed disputed, and a statement indicating the provision of information about the creditor.
Know Your Rights
The FTC has specifically laid out guidelines regarding how debt collectors are able to contact you. These guidelines prohibit debt collectors from:
- Contacting you at inconvenient times or places, such as before 8 in the morning or after 9 at night, unless you agree to it.
- Contacting you at your place of work if they’re told not to.
- Pretending to be someone else, like an attorney or government agency.
- Harassing, threatening, or deceiving you.
It also states that collectors may contact you about the collection of your debt by phone, letter, e-mail, or text message, provided that they follow a certain set of rules and that they disclose that they are indeed debt collectors.
It will also be helpful to note that not paying your credit card bills, loans, and other forms of debt is considered a civil offense, not a criminal offense, and therefore, won’t send you to jail. But failure to pay taxes and child support can.
While it may not indeed send you to jail, you are still likely to be sued for uncollected debt and is still liable for the debt, which could reflect on your credit report and stay on the report for up to 7 years. However, the state’s statute of limitations provides how long after the incurred debt can you be sued. For most states, it can be 3 to 6 years, while some may reach up to 10 years. This means you can’t be sued for old debt that has passed that point.
Protecting Yourself
Remember that if a debt collection agency is indeed harassing you, you can file a complaint against the collection agency through the Consumer Financial Protection Bureau using the complaint form found on their website. You can also issue a drop dead letter by certified mail to stop them from ever harassing you again.
Lastly, while you are protected against being harassed by collection agencies, you are still liable for the debt you owe. You can negotiate your debt through the agency to settle for an amount that you are capable of paying in the least amount of time possible. However, reaching a point of being contacted by a collections agency can have strong implications for your credit score.
The best protection against debt collectors is avoiding the situation altogether. Settle your debts before they reach collections by paying on-time and in full to raise your credit score.